Philip Hollobone: May I suggest to the Secretary of State that progress has been pathetically slow, given that foreign national prisoners now make up some 13 per cent. of the prison population in England and Wales? Does not give a hollow sound to the Prime Minister's pledge in July 2007, when he said:
	"If you commit a crime you will be deported from our country. You play by the rules or you face the consequences"?

Jack Straw: I am happy to seek to provide the hon. Gentleman with an answer and lay it before the House. However, let me emphasise that we have greatly reduced the number of asylum seekers who come to this country-it is now around a third of the number with which I was faced when I became Home Secretary twelve and a half years ago. We have significantly tightened border controls-often with not much help from the Opposition on the practical policies that are required. We are also increasing year by year the numbers deported.

Jack Straw: What we want to see is prison made effective. It is tough, and those who recognise the reality of prison would not want to spend a day inside. We have dramatically increased the resources available for education and, as my hon. Friend the Minister of State, Ministry of Justice, my hon. Friend the Member for Liverpool, Garston (Maria Eagle) has said, we have significantly increased the resources for drug treatment. Prisoners on longer-term sentences have to prove, by their good behaviour, that they are ready for parole. Those on indeterminate sentences cannot be-and are not-released unless the parole board judges that it is safe for that to happen.

David Miliband: We should certainly have a foreign policy that is decided independently by the Government and people of this country, but we should not have an isolated foreign policy that attempts to work on its own. I am proud that we are very close partners of the United States, European Union countries and a large number of countries in the Gulf, which are very concerned about the situation. The attention that we have been paying to Yemen in the past 18 months is in significant part a product of the growing concern, from 2008, of countries in the Gulf that wanted British help regarding their concerns about the situation in the Yemen. We are not unwelcome helpers in Yemen, and we certainly are not trying to recolonise it. That is an important point to emphasise.

David Miliband: The hon. Gentleman makes an important point, although I think that he would be one of the first to recognise that it is wrong to talk simply about al-Qaeda and not to distinguish between its senior leadership based in Afghanistan and Pakistan and Al-Qaeda in the Arabian Peninsula or in the Maghreb. There are distinctive issues related to al-Qaeda's senior leadership on the one hand and its so-called franchises on the other. They are certainly worthy of study and debate, and the more the better, as far as I am concerned. However, the hon. Member for East Worthing and Shoreham (Tim Loughton) made the good point that there was a meeting with parliamentarians on the situation in Yemen before the Christmas incident. The fact that there is a thriving all-party parliamentary group, chaired by my right hon. Friend the Member for Leicester, East (Keith Vaz), speaks for the close links that exist between Britain and Yemen, and long may they continue.

Paul Goodman: Given that a significant proportion of terror offenders turn out to have been radicalised towards extremism here in Britain rather than in the Yemen or elsewhere, should not the Prime Minister also consider calling a summit on the radicalisation towards extremism and terror that takes place here?

David Miliband: I am not sure whether it is the Government who are spending the money on the skyscrapers to which he refers, but he makes an important point. Some of the largest pledges at the 2006 conference were from Gulf countries, not western countries. It is important that those pledges are fulfilled. My right hon. Friend the Member for Leicester, East raised the question of which of those pledges had been paid, and that is a pertinent point.
	The point of mentioning our aid programmes is not some vainglorious attempt to say that we have the biggest programme but to explain that there is a British commitment and it is proportionate to the sort of responsibility that we should bear. The hon. Gentleman is right to say that this is an issue that needs to be raised by countries of the region. I am pleased to say that in the past 18 months they have been doing so, and they have put us on alert about their needs.

Alan Johnson: With permission, Mr Speaker, I would like to make a statement on the failed attempt to destroy a passenger plane at Detroit airport on Christmas day and its implications for national security. My right hon. and noble Friend the Secretary of State for Transport will make this statement in the other place.
	On 24th December, Umah Farouk Abdulmutallab, a Nigerian citizen, travelled from Lagos to Amsterdam, where he boarded Northwestern Airlines flight 253 to Detroit. As the flight was approaching Detroit on Christmas day, he detonated a device that was strapped to his upper thigh and groin area which resulted in a fire and a small explosion. He was restrained and subdued by passengers and flight crew and he remains in custody in the US.
	Authorities in the US, the UK, the Netherlands, Nigeria and Yemen are now doing everything they can to piece together Abdulmutallab's movements shortly before this attack, and are considering what urgent steps need to be taken to prevent further attacks of this nature.
	It is an issue of grave concern that the explosive device was not detected by airport security in either Lagos or Amsterdam. As has been widely reported, Abdulmutallab attended University college London between 2005 and 2008, where he completed a degree in engineering. During this time he was known to the Security Service but not as somebody engaged in violent extremism. His family and friends have stated their belief that he turned to this during his time in Yemen.
	From the information we have currently, it is not possible to chart with absolute certainty Abdulmutallab's exact movements after he left the UK in 2008. He is known to have spent several months studying international business at a university in Dubai and in August 2009 he travelled to Yemen, where he is thought to have stayed until December before returning to west Africa. He came to the attention of UK authorities again on 28 April 2009 when he applied for a multi-entry student visitor visa to attend an eight-day course provided by Discovery Life Coaching based in east London. The UK Border Agency refused his visa application because Discovery did not hold a valid accreditation with a UKBA-approved body and was not eligible to sponsor international students.
	Since March 2009, only institutions which are either tier 4 sponsors or hold valid accreditation are permitted to bring in short-term foreign students from outside the EEA. Universities and colleges must be able to demonstrate that they are offering genuine courses that will benefit students seeking to study in the UK. This new regime has reduced the number of institutions able to bring students to the UK from over 4,000 to approximately 2,000. Following the refusal of his application, Abdulmutallab's name was added to the UKBA watch list.
	In the light of the serious questions that this incident has raised, I want to set out today, first, the immediate steps that we are taking to tighten aviation security, secondly, what measures we are taking to prevent radicalisation in our universities, and thirdly the actions we are taking to disrupt al-Qaeda in countries where it is known to be active, in order to prevent future terrorist attacks, and to improve co-operation with our international partners.
	It is of great concern that Abdulmutallab was able to penetrate airport security at Amsterdam. The device he used had clearly been constructed with the precise aim of making detection by existing screening methods extremely difficult.
	Abdulmutallab underwent a security check at Schipol airport in Amsterdam, as do all passengers transferring from Nigeria to another flight. Although Schipol airport is trialling body scanners, they were not in use for that flight. He passed through a metal detection gate, which would have detected objects such as explosive devices with metallic components, and knives and firearms. However, certain types of explosive, without metallic parts and which can also concealed next to the body, cannot be detected by that technology, which is the reason why airports also search passengers at random.
	To defeat the terrorist threat requires constant vigilance and adaptability. A great deal of progress has been made in enhancing aviation and border security since 9/11; but terrorists are inventive, the scale and nature of the threat changes, and new technology needs to be harnessed to meet new threats, while minimising inconvenience to passengers.
	Last year, we issued new public guidance to the industry on our technical requirements for screening and the detection of improvised explosive devices. The Prime Minister instigated an urgent review of airport security following the incident in Detroit. My noble friend the Secretary of State for Transport and I have been intensively engaged in the review, and we are today setting out our initial steps.
	It is clear that no one measure will be enough to defeat inventive and determined terrorists, and there is no single technology that we can guarantee will be 100 per cent. effective against such attacks. Airport security is multifaceted and needs to adapt constantly to evolving threats. We therefore intend to make changes to our aviation security regime.
	Air passengers are already used to being searched by hand, and having their baggage tested for traces of explosives. The Government will direct airports to increase the proportion of passengers searched in that way. There may be some additional delays as airports adapt, but I am sure the travelling public will appreciate the reasons behind this.
	The Transport Secretary has brought into force new restrictions that tighten up security screening for transit passengers, and is reviewing the support we provide for security standards in airports operating direct flights to the UK. Passengers will see an increased presence of detection or sniffer dogs at airports to add to our explosives detection capability.
	We also intend to introduce more body scanners. The first scanners will be deployed in around three weeks at Heathrow. Over time, they will be introduced more widely, and we will be requiring all UK airports to introduce explosive trace detection equipment by the end of the year. We are discussing urgently with the airport industry the best way of doing all this, which will include a code of practice dealing with the operational and privacy issues involved.
	BAA has started training airport security staff in behavioural analysis techniques, which will help them to spot passengers acting unusually and target them for additional search. Beyond that, we are examining carefully whether additional targeted passenger profiling might help to enhance airport security. We will be considering all the issues involved, mindful of civil liberties concerns, aware that identity-based profiling has its limitations, but conscious of our overriding obligations to protect people's life and liberty.
	These measures build on the substantial progress we have made in recent years to strengthen our borders. The roll-out of e-Borders, which will check passengers, including those in transit, against the watch list, will be 95 per cent complete by the end of this year, and makes us one of only a handful of countries to have the technology that can carry out advanced passenger data checks against our watch list before people travel to the UK. Those who apply for a visa-whether they do so from Bangkok, Lahore or Pretoria-have to provide fingerprints and their records are checked against our watch list, which holds over a million records of known criminals, terrorists, people who have tried to enter the country illegally or been deported, and those who agencies consider a threat to our security.
	Through the e-Borders programme and through screening passengers against the watch list, we have since 2005 made 4,900 arrests for crimes including murder, rape and assault. In addition, UK Border Agency staff based overseas, working with airlines, prevented more than 65,000 inadequately documented passengers from travelling to the UK during 2009.
	Abdulmutallab's failed attack highlights the importance of information sharing between the various agencies about people who pose a threat to our security. The UK watch list is managed by the UK Border Agency and incorporates intelligence from the law enforcement and the security and intelligence agencies into a single index. Nevertheless, although the integrated approach works very well, we want to see if we can further strengthen it. The Home Office will therefore be conducting an urgent review of the robustness of our watch-list. The review will report to me in two weeks and, subject to security restrictions, I will report the findings to Parliament.
	The House will no doubt be concerned about the possibility that Abdulmutallab's radicalisation may have begun or been fuelled during his time studying at University college London. It is important to remember that the values of openness, intellectual scrutiny and the freedom of debate and tolerance promoted in higher education are one of the most effective ways of challenging views which we may find abhorrent but that remain within the law.
	However, we know that a small minority of people supporting violent extremism have actively sought to influence and recruit people through targeting learners in colleges and universities, and we must offer universities the best advice and guidance to help prevent extremism. As part of a measured and effective response to the threat, the Department for Business, Innovation and Skills has published guidance on managing the risk of violent extremism in universities, and is working closely with universities in priority areas to provide targeted support.
	Alongside this, each university has a designated police security contact with which university management can discuss concerns. The Prevent strand of Contest, our counter-terrorism strategy, works closely with the higher and further education sectors and funds a full-time Prevent officer at the National Union of Students. As I have said, Abdulmutallab's family believe he turned to violent extremism after leaving the UK, but we need to ensure that this close co-operation continues in our efforts to stop radicalisation of young people in our colleges and universities.
	Finally, I want to say something about our work internationally and the steps that the Government are taking abroad to disrupt al-Qaeda wherever they are active. Our success in tackling the international terror threat depends on strong relationships with our international partnerships. In our efforts to thwart al-Qaeda, we have a long-standing, productive partnership with the US.
	I am not prepared to go into detail on this particular case about what was shared with the US and when. It is an established and accepted principle that we do not routinely comment on intelligence matters. Moreover, some of these issues are still current and are highly sensitive. However, I would like to clarify that although we did, in line with standard working procedures, provide information to the US linked to the wider aspects of this case, none of the information that we held or shared indicated that Abdulmutallab was about to attempt a terrorist attack against the US.
	This morning, I met Jane Lute, the US Deputy Secretary for Homeland Security. We discussed how over the coming months, in the light of this failed attack, we will work together with other international partners to maintain public confidence in aviation security and deepen our partnership to disrupt al-Qaeda's activities overseas. Pushed out of Afghanistan and under increasing pressure in the border areas of Pakistan, affiliates and allies of al-Qaeda-such as Al-Qaeda in the Arabian Peninsula, the group claiming responsibility for the Detroit bombing-have raised their profile. With the failed Detroit attack they have again demonstrated their intent to attack innocent people across the world.
	The aim of our counter-terrorism strategy is not just to reduce our own vulnerability, but to dismantle those terrorist organisations which pose a threat to the UK, whether at home or abroad.
	Al-Qaeda will take any opportunity to exploit ungoverned space and instability. Whether the threat is in the Sahel, Somalia, Yemen, Pakistan, Iraq or Afghanistan, we must support Governments and work with partners to address both the threat of attack and the underlying causes of extremism and instability. We have been working with the Yemeni Government, as my right hon. Friend the Foreign Secretary just said, for a number of years, helping to improve their law-enforcement, intelligence and security apparatus, and to disrupt al-Qaeda and deny them a safe haven in Yemen for the future. We are also one of the leading donors on development in the country-our current commitment standing at £100 million by 2011.
	We recognise the need to strengthen further our partnership with countries in the region and beyond so that we can co-ordinate our efforts against al-Qaeda more effectively and provide greater support for the Yemeni people to reject violent extremism. International co-operation is critical to meeting what is a global threat, and the coming together of the international community in London later this month to discuss Yemen will be an important step towards security in Yemen and across the globe.
	It is important to reiterate that the incident was a failed attack on the US by a Nigerian national-someone who was refused entry to the UK and who, it seems, was radicalised after he left this country. However, there are lessons to be learned by the international community, and the measures that I have outlined will provide the UK with greater protection from terrorist attack. Along with our work overseas and with our international partners, enhanced airport security and more thorough collation of intelligence, we will be able to strengthen our efforts to tackle the root cause of violent extremism and reduce the threat of future attack.

Chris Grayling: I am grateful to the Home Secretary for providing me with an advance copy of his statement. I shall start with airport security.
	We all accept that as we learn the lessons from the recent plot, happily an unsuccessful one, additional security measures will have to be taken. The use of more sophisticated scanning technologies is inevitable, although we will have to make sure that sensible measures are taken to protect privacy. However, the Home Secretary's statement is ambiguous about scanners, so will he clarify whether he plans to make full- body scanners compulsory at all UK airports? He talked about e-Borders, so will he also clarify the situation with the European Union over the use of the e-Borders project? Will there be European legal restrictions on the use of the e-Borders database?
	We believe that it is necessary to take a more intelligence-led approach to airport security, as well as to watch carefully for suspicious behaviour by passengers, so the Government will have our support in taking prudent measures to protect passengers. Those matters of judgment must be kept under constant review, even if there is public attention only when the security measures are challenged.
	However, the person who should be before the House explaining himself this afternoon is not the Home Secretary but the Prime Minister. Twice in three days the Prime Minister has been caught out making false claims about the contacts that have taken place between Britain and the United States over the airline bomb plot and the security threat to our airports. On Sunday he admitted to the BBC that supposed discussions between himself and President Obama about the bomb plot and the situation in Yemen had not actually taken place. Then, yesterday, he claimed that Britain had supplied to the United States in 2008 intelligence about the bomb suspect and his links to extremists-a claim that Downing Street now admits was untrue. This Government, the House will remember, have systematically misused intelligence data over the years, most notably in relation to the so-called dodgy dossier. Does the Home Secretary agree that it is absolutely unacceptable for the Prime Minister-the man who leads our Government-to exaggerate, mislead on or spin intelligence information, particularly when it relates to a terrorist threat?
	The Home Secretary told the House this afternoon: "It is an established and accepted principle that we do not routinely comment on intelligence matters." Why did the Prime Minister and Downing street break that principle this week? Does the Home Secretary agree also that it is damaging to our most important intelligence relationship, with the United States, for Downing street to disseminate information in such an inaccurate and cavalier way?
	The entire House will be relieved that on this occasion the bomb plot was unsuccessful. It will serve as a strong reminder to Governments across the world of the ever-present terrorist threat and the fact that we all need to remain vigilant about that threat as well as united in a determination to defeat it.
	It is also worth saying that the threat from a small group of Islamic extremists in no way represents the views and beliefs of the vast majority of decent, law-abiding Muslim people in this country and around the world. People of all faiths have been victims of terrorists over the past decade, and we must all stand together against that threat. However, that task has not been helped by the actions of Downing street in recent days.

Alan Johnson: I regret the fact that the hon. Gentleman uses this very tense time to score cheap party political points. I saw lots of faces among those on the Conservative Benches looking appalled that this situation should be used to make a personal attack on the Prime Minister.
	The hon. Gentleman made only three points that I believe are relevant to this issue. First, on the number of full-body scanners, we now need to work with the airline industry to decide how many of these scanners we can have and where we can locate them. As I said, we will have the first ready at Heathrow within three weeks. Thereafter, they will be become much more widely available in terms of the capacity to manufacture them and put them in place and the need to get from the various airline companies their authority, agreement and input.
	The hon. Gentleman talked about the EU situation. That was clarified just before Christmas when, thankfully, the Commission agreed that there were no Community issues about the transfer of information. That obviously still requires the countries transferring the information to agree their data-processing techniques, but there is no EU issue; that is what the Commission was originally looking at.
	The third point was about our use of intelligence and our co-operation with the United States. As I said, the Prime Minister was absolutely right that we did share information with the US. We do not routinely comment on the nature of such information or the information itself. None of that information suggested that Abdulmutallab was planning a terrorist plot. Incidentally, as I mentioned, I met Jane Lute, the Deputy Secretary for Homeland Security, this morning, and she did not mention this matter at all. We spoke about the productive way we can work together to deal with these issues. There is absolutely no relationship in the world stronger than the relationship between the UK and the US, particularly on counter-terrorism, where we work closely together and will continue to do so in the light of this latest threat.

Keith Vaz: The Home Affairs Committee recently visited both Heathrow and Schiphol, and the Home Secretary is right to consult the airlines and be measured in his response. Of course, in principle, we should have the body scanners, but international co-operation is the most important aspect. I accept what he says about sharing information, but are there any more lessons to be learnt about how we can improve the situation?

Alan Johnson: My hon. Friend is the Chairman of the Transport Select Committee, and I know that she has taken a great interest in this issue. I talked to Jane Lute this morning-she is the US Deputy Secretary for Homeland Security-about the best way to have an international gathering to discuss the lessons emerging from this and we are still talking things through. There was a view that we should perhaps get a gathering of Ministers together next week in Brussels. Actually, the opportunity under the Spanish presidency, which is very interested in this matter, comes up in a few weeks' time. More and more we are centring on that as the opportunity to get Transport Ministers, homeland security Ministers and perhaps Defence Ministers together to talk about an integrated programme as to how we can act internationally.
	My hon. Friend is absolutely right: this will not be solved by us nationally, by its very definition-a Nigerian coming from Nigeria through Holland to bomb Detroit has ramifications for a much wider set of countries. We need to deal with this matter internationally, which is what we intend to do.

Edward Miliband: The hon. Gentleman asks serious questions that deserve serious answers. Let me go through them. On his question about process and why we got to the stage that we did, the mess of process partly represented big disagreements about substance, because there was concern among a number of developing countries about the notion of Denmark tabling its own text. Why did it take until 3 am on the Friday for the leaders' representatives from a group of 27 countries-representing 49 countries if the EU is included-to get together in a room? It was because the Danes were systematically prevented from tabling a text, because people kept saying, "We are not ready yet to go into a smaller room". The same thing happened at Bali and Kyoto. That was one reason why we did not bridge some of the divides-because by 3 am on the Friday there were less than 24 hours of the conference to go.
	The hon. Gentleman's other points about procedure are important and correct. The notion that negotiators should be left to negotiate, even though they take instructions from Ministers, is insufficient. His notion that there should be some kind of permanent session is also an option that should be considered. It is very important that we do not leave it until June and the mid-year negotiations in Bonn to restart the whole process. The EU needs to use its commitment to going to 30 per cent. with comparable action from others. We need to build more of a consensus than we have in the EU at the moment to move to 30 per cent., but I think that the process of 31 January commitments is an initial stage in which the EU should seek to push others to higher levels of ambition, and should itself seek to be as ambitious as possible.
	I disagree with the hon. Gentleman slightly about the Commonwealth, because it issued and pushed an important set of demands and requests regarding finance, some of which came through in the final agreement.
	On the US and China, we want the deepest cuts from all countries, including the United States, but that is dependent on its legislation. It was willing to make an initial offer before making legislation, but the legislation that went through the House of Representatives was more ambitious than the offer that was made, so there is some hope there.
	On the legal treaty and the attitude of certain developing countries, a process of persuasion is partly needed. They need to be persuaded that they have nothing to fear from the legal assurance that is, in my view, necessary. That argument has not yet been won, but there is a broad coalition of developing and developed countries that want the legal framework. That coalition is important and could help us in the months and year ahead.

Jim Sheridan: As part of a cross-party delegation I recently visited some of those islands in the Pacific and saw at first hand the difficulties faced by many of the poorest and most vulnerable communities in the world. Following the Copenhagen discussions, can my right hon. Friend offer any hope or support to those poor communities to stop them from sinking even further into the sea?

Andrew Pelling: Queen Victoria's glorious diamond jubilee was also held in June. It is a historic part of her reign that is very much remembered. The Minister talked about the importance of this jubilee being an historic occasion, but how can the Government assist in ensuring that it is?

Alistair Darling: No. It is important that the right hon. Gentleman recognises that the Bill requires the Government, in line with the proposals I set out in the Budget and the pre-Budget report, to halve our borrowing over a four-year period, which I believe is absolutely essential. The measures I have set out will enable us to do that, but it is important that we do it in way that supports and does not damage the economy. Indeed, this is one of the differences between the Government and the Opposition. One reason why we should not go further at the moment is that going further and faster, and bringing forward that deficit reduction, would be damaging to the economy. We are supporting the economy now because we are not yet out of recession. We need to ensure that we have the support of public expenditure, which is keeping the economy going, and supporting the public, businesses and families.

Alistair Darling: I shall come on to that point, but as I was saying before I gave way all Governments have rules and objectives. Up until 1997, those were simply statements made by the Chancellor in a Budget or at some other fiscal event. Since 1998, we have had the code for fiscal stability and two rules that have guided fiscal policy for the past 10 years. The hon. Gentleman is right: it is open to any Government and Chancellor to say that circumstances have changed and so we need to change policy. I have been a Minister for the past 12 years and I can tell the hon. Gentleman that the discipline created by rules, so the Chancellor can tell Departments that they can not have any more funds because it would breach a particular rule, is important. I daresay that that was also important for previous Governments. Today we are legislating to put on the statute book a requirement to reduce the deficit by half. Of course, it will not be a question of going to jail if we do not do it, but having to come back to the House to seek further legislation will be a discipline for future Governments. It is not uncommon for Governments in other parts of the world to have similar strictures on them.
	The two rules that the Government operated between 1997 and 2007, before the current financial crisis hit us and hit other countries, were to balance the budget, excluding public investment, over the economic cycle and to keep Government debt at a prudent level. Those two rules were appropriate to the challenges of the time. We wanted to increase public investment, and at the time there was a consensus in this House-certainly in the latter part of the 1990s and the early part of the last decade-that our public services did need more money spent on them, including the health service and schools. Those rules were designed to enable us to do that. Over that 10-year economic cycle, which ended in 2007, we were able to balance the budget and borrow to invest, which is something that previous Governments of both political colours had not been able to do previously. We were able to increase significantly investment in public services, tripling it from 0.6 per cent. of GDP in 1996-97 to 2 per cent. in 2006-07, its highest level since 1979. We also saw a continuous expansion in the economy, while also reducing Government debt as a share of GDP, from 42.5 per cent. in 1996-97 to 36 per cent. in 2006-07.
	Those rules stood our economy and the country in good stead during that period, but events towards the end of 2007 and in 2008 fundamentally changed the economic situation for the entire global economy, because we experienced the worst economic conditions seen in more than 60 years. We were operating in a completely different environment, and policy, here and in other countries, needed to adapt to reflect that. No one could have foreseen the sheer scale and spread of the global financial recession that hit economies all over the world in 2007 and at the beginning of 2008. The result is that borrowing and debt have risen in most countries, ours included.

George Osborne: I agree with my-I was about to say "my hon. Friend", but that would be to get ahead of ourselves, would it not? We are all being very nice to the Liberal Democrats these days. I agree with the hon. Lady. I take it from what she said that she will be joining us in the Division Lobby tonight; I certainly hope she will.
	Hon. Members might be hoping to find something a bit more impressive in clause 3 Bill, but in it we discover that the Treasury will be required to tell us whether it has met its borrowing forecasts. The last time I checked, I found that that happens in every single Budget statement and pre-Budget report. However, we now need legislation to turn what has been the standard practice of Chancellors, at least since the second world war, into the law of the land. And when will the Treasury be required by law to tell us whether it has succeeded in performing its duty to secure sound public finances? According to clause 3(5), this will have to happen
	"during the financial year ending with 31 March 2016."
	We shall not have long to wait, then, for the Government's assessment of how well they are doing. They cannot get their borrowing forecasts right from one month to another, yet they now expect us to believe a commitment written in statute relating to 2016. They are living in a completely parallel universe.
	Let us look at clause 4, which relates to accountability. Let us see what terrible fate will await the Treasury if it fails to comply with the order imposed on it by the Treasury. Will the Chancellor be hauled off to the Tower? Will he be forced to hand in the great seals of his office? Will his pay be docked for poor performance? Will he at least have to apologise? No. Clause 4 states that the fact that any duty imposed as a result of the Bill
	"has not been, or will or may not be, complied with does not affect the lawfulness of anything done, or omitted to be done, by any person."
	This is an absolutely ridiculous clause. There are no penalties. This must be the first law introduced in Parliament that contains absolutely no legal sanction whatever for those who break it.
	We have only two more clauses to consider. Clause 5 is about interpretation, and states that the Treasury will be required to "explain the meaning" of such terms as "public sector net borrowing" and "public sector net debt". It is a shame that the meaning of those terms was not explained to the previous Chancellor when he was in office. As far as I can see, the clause does not require a proper explanation of the state of the national accounts that takes into account the private finance initiative liabilities that are kept off-balance sheet, and public sector pension liabilities.
	Finally, clause 6 deals with the short title of the Bill, and tells us that the legislation will be known as the Fiscal Responsibility Act 2010. We will have to see whether it ever becomes an Act. This clause confirms a time-honoured principle in this place: the greater the claims that are made by a Bill's title, the less substance it usually contains.
	Of course we have to debate this vacuous and irrelevant legislation, but why did the Chancellor feel the compelling need to introduce it? Why is he the first Chancellor in history to feel that he needs an Act of Parliament on top of a Budget statement? There can be only two explanations: either he does not trust himself to secure sound public finances, or he knows that the public do not trust him to secure them. Neither is exactly a ringing endorsement; both are a reflection of the catastrophic, disastrous state to which this Government have reduced the finances of this country.
	I have searched far and wide to find another country that has introduced a fiscal responsibility Act, and I have found one. It is that shining example of fiscal rectitude, Nigeria. That is where the Chancellor appears to have got his inspiration from. It was no doubt sent to him in one of those e-mails that we all get from Nigeria. Perhaps it said, "Dear honoured sir, I am a former finance Minister of this country, and I have a plan to reduce your debts. Please send me your bank account details and I will forward the money by return."  [ Laughter. ] Of course this would be funny, if this were not such a fundamentally dishonest piece of legislation, and if this were not such a fundamentally serious time, in which the credibility of our nation and its ability to pay its way in the world are being questioned by markets, investors and credit rating agencies around the world.
	A poll in yesterday's  Financial Times found that a fiscal crisis was the biggest single risk facing the British economy at the moment. The managing director of Moody's Global Sovereign Risk group is now warning of the danger of
	"an abrupt increase in long term interest rates"
	in the UK. The former Deputy Governor of the Bank of England, Sir Howard Davies, whom the Prime Minister appointed to be the first head of the FSA, said this week that
	"the major risk" to the British economy
	"is the loss of confidence in the government's ability to get the public finances back under control".
	And today we hear that the world's biggest bond investor, Pimco, has announced that it will be selling off UK Government bonds this year. It says that this is a "significant policy statement" prompted by concerns about rising borrowing levels in this country. It has just issued a statement saying that the question is when, not if, Britain's credit rating will be downgraded.

George Osborne: My right hon. Friend makes an extremely telling point, and I am going to come on exactly to the threat to interest rates posed by the Government's policy. Before I move on from Pimco, I cannot help noticing that the head of the European arm of Pimco, one Mr. Andrew Balls, is the brother of the Schools Secretary. Clearly, the Balls family's confidence in the Chancellor's ability to do his job runs across the brothers.
	My right hon. Friend the Member for Wokingham (Mr. Redwood) makes a very important point about gilts and the fact that we are now in a period when the Bank of England is pursuing a policy of quantitative easing, but with £200 billion of gilts to get away next year, we need buyers, not sellers of those gilts. Here, however, we have the world's largest bond investor saying that it is going to be selling gilts next year. Of course gilt yields are rising-up 1 per cent. last year and up 0.5 per cent. in the last month, which is twice the rate of increase in countries like Germany.
	Rising gilt yields, of course, mean in the end rising interest rates, so a central objective of policy for recovery must be to allow the Bank of England to keep interest rates as low as possible for as long as possible, which requires a credible fiscal plan. The absence of such a plan from the Labour Government is pushing up the yields that will push up the interest rates and the mortgage rates, causing businesses to fail and jobs to be lost. The Chancellor, however, remains paralysed by inaction. He seems to see the storm clouds gathering, but he is doing nothing. We know the reason why. The Prime Minister and Schools Secretary-the man whom the Prime Minister wanted to be the Chancellor-will not let him. The disagreements between them are now an open secret. They are on the front page of  The Financial Times and are being read across Europe. The Chancellor is at least vaguely aware, I think, of the seriousness of the debt crisis this country faces, but the Prime Minister is in complete denial. The Chancellor at least uses the word "cuts", but the Prime Minister could not bring himself to use that word in the first big interview he gave in the new year.
	I believe that the Chancellor wanted to accelerate the reduction in the deficit and he wanted to do so in the pre-Budget report, but he was overruled by the Prime Minister who accelerated the spending instead. That is the problem-the Chancellor keeps losing this argument in Downing street and the result is that Britain's credibility in the world markets is further undermined. Britain's credit rating is for the first time in our history at serious risk and British interest rates are set to rise in a recovery.
	The answer surely is to deal more decisively with the deficit. As the Chancellor well knows, that is the view of British business and the CBI. The Labour party used to parade the CBI as one of its great supporters, and I believe that in 1997 the CBI was invited into Downing street before the trade unions were. Now the Labour party dismisses the views of the organisation that speaks for many British businesses, but this is what Richard Lambert, the man who was also appointed to the Monetary Policy Committee by the Prime Minister, says:
	"History tell us that these are really difficult nettles to grasp but if you grasp them in a clear and bold way, then the pain lasts for a shorter period than if you just limply grab and hold of them... Our strong instincts are that the risks of going too soon are less than the risks of waiting too long... Two full parliaments of chancellors being responsible just seems too much to expect."
	Here is the view of the OECD expressed in the last few days:
	"Major fiscal consolidation is needed"
	in the UK
	"and more concrete plans should be developed and communicated as early as possible."
	That is the OECD's view expressed after the pre-Budget report.
	Here, now, is the view of the international markets. BNP Paribas says:
	"The UK's public finances are in such a poor state that delay could lead to a loss of confidence, a downgrade of the UK credit rating and a crisis in the public finances."
	Sir John Gieve, another former deputy governor of the Bank of England appointed by the Prime Minister, stated that the Government's plan
	"will be hard to sustain politically and eliminating the structural deficit more quickly in 2011 and 2012 looks a better course."

George Osborne: The Chancellor says that he has the same view as the Governor of the Bank of England-he has just said that-but when asked by the Treasury Select Committee what he thought about the risk of a credit downgrade to the UK, the Governor said that we needed "a credible plan", which by implication does not currently exist, and that such a plan should consist of the elimination of a large part of the structural deficit in the next Parliament. That is a view I share with the Governor of the Bank of England and it is clearly not the view that the same Governor believes is being pursued currently-or else he would not have referred to the need for a credible plan.

George Osborne: This is what the Governor of the Bank of England said when asked- [Interruption.] I know that it comes as a complete surprise to Labour Members that the Conservative party agrees with the Governor of the Bank of England and the Chancellor of the day does not seem to agree with him. When asked to comment on the plan that the Chancellor had set out, the Governor said this, and I have it before me:
	"I think"
	the plan
	"has to be something where a really significant reduction in the deficit, the elimination of a large part of the structural deficit, takes place over the lifetime of a parliament, which is the period for which a government is elected. Beyond that"-
	commenting on the Chancellor's plan-
	is a statement of intent and hope rather than a plan for which someone can be held accountable."
	That is what he said in evidence to the Treasury Select Committee on 24 November 2009. I agree with the Governor of the Bank of England and that is our policy.
	It is increasingly clear, by the way, that virtually every independent and respected opinion in this country agrees with us rather than with the Government of the day. Such opinion is also in agreement with our approach towards creating a fiscal framework in which we can be held accountable. What we are going to do if we are elected to power in the next few months is create a proper and independent office for budget responsibility. Indeed, we publish today draft legislation- [Interruption.] Well, I am not sure what Liberal Democrat policy is on independent fiscal accountability-although, of course, I must be careful.
	Let me explain the very significant difference between what we are proposing and will implement and what the Government are presenting to Parliament today. The first striking difference is that while this Bill leaves the Treasury in charge of forecasts and gives the Chancellor the room to fix the forecasts in order to fit the Budget policy-as we know, a practice that has developed in recent years-our Bill would for the first time ever put the forecasts of the nation's finances in independent hands. In other words, it would not be the Chancellor of the Exchequer of the day who published the borrowing and debt forecasts; it would be an independent office for budget responsibility, properly resourced and accountable to Parliament.
	Secondly, while this Bill leaves the Chancellor as judge and jury on whether he is sticking to his fiscal strategy, our Bill would subject the Chancellor to the independent verdict of an independent panel of experts in the office for budget responsibility. While this Bill tells us nothing about the true state of the nation's finances, our Bill would give the country a statutory independent audit of the true cost of public sector pension liabilities and the dodgy off-sheet accounting of PFI contracts, and give us a proper national audit of the nation's finances.

George Osborne: It would be rather like the Monetary Policy Committee. It would be independent, but accountable to Parliament. Its members would, I assume, appear before the Treasury Committee, and it would be asked to make a technical judgment in publishing the nation's borrowing and debt forecasts.
	Instead of the Chancellor of the Exchequer, on Budget day or pre-Budget report day, standing up and saying "We predict that the country will borrow X. Y and Z over the coming years", this independent body, accountable to Parliament, would make the judgment. It is a technical judgment, and we do not need an elected politician to make it. We need elected politicians to be informed by a proper, independent judgment of the nation's finances; then we shall all be able to make the decisions on tax and spending for which we are held democratically accountable. It is clear from what has happened over the last few years how misled Parliament has been by the borrowing forecasts announced by the present Chancellor and his predecessor, which have turned out to be completely wrong and have led to decisions that were not in the interests of the country.

George Osborne: At or around the time of the Budget, and the pre-Budget report, the body will publish not just the forecasts but its view on whether the Government are on course to fulfil the mandate set by the Chancellor-in other words, the elimination of a large part of the structural deficit over the Parliament-and an independent report. Obviously, if the Government were shown to be off course, that would be hugely embarrassing for the Chancellor of the day.
	I do not think that a Chancellor who regularly disagreed with the independent body could survive for long, so it would pose a challenge to him. This would constitute a proper, serious sanction. In extremis, the Chancellor of the day can overrule the Monetary Policy Committee or the independence of the Bank of England, although of course the question never arises. In this case, the Chancellor of the Exchequer would face a very difficult time if, after he or she had said "We will achieve this fiscal result over the coming years", the independent body, at the time of the Budget, said "Actually, they will not."

Frank Field: That is true, and it is a sadness for me, but clearly not a big enough sadness to the hon. Gentleman, who is now leaving the Chamber.
	Given the Chancellor's ability to present such thin gruel to the House, I am surprised that his party did not claim to see the signs of joined-up up government. Yesterday they announced that in future all five-year-olds in our schools would be taught the dangers of debt, how not to fall into debt, what to do if they fell into debt, and how to get out of debt as quickly as possible. Bright, or perhaps not so bright, five-year-olds might suggest that the lessons could start here rather than in the classrooms.
	I want, however, to inject a note of seriousness, if not horror, into the debate. I want to compare our present position with the phoney war that led up to world war two. Although those on all three Front Benches now talk of the need to lower the deficit, they are all also talking about spending more. I do not believe that our voters-the voters of this country-have any idea how serious the financial position of the country is, or how massive the cuts will have to be if we are to return some semblance of order to our national accounts.
	Let me illustrate that first by looking at the payments on the new debt. Let us suppose that we could not roll that debt over, but had to close Government Departments. The cost of the debt in the first year of bailing us out-I am ignoring past debt, which we have to service as well-would be the loss of the Department for Culture, Media and Sport, the Department for Environment, Food and Rural Affairs, the Department for business and enterprise, the Law Officers' Department and the Northern Ireland Office. In the second year-we are not concerned only with the new tranche of debt; there would be two years of debt-we would have to lose, in its entirety, the Department responsible for innovation, the universities and skills. In the third year, the debt repayments would be greater than the budgets for defence, the Cabinet Office and some other Departments of State. It would decimate what we do as a Government if we had to pay for the money that we intend to borrow by closing Government Departments and the programmes that go with them. I do not believe that the people of this country yet have any idea about the seriousness of the position that we face.

Frank Field: In my view, if we do not cut enough and soon enough, we will not have a currency. The debate about whether we should have taxation or cuts is to some extent academic. The plea about tax evasion and avoidance that my hon. Friend has made ever since he has been in the House-ever since I have enjoyed listening to him-is one that I was pleased to hear the Chancellor pick up in such a positive way, but that alone is not enough.
	I return to the central issue of whether we are going to see ourselves through to the general election. We have been living in a cloud cuckoo land partly because all the political parties have been saying that they are going to spend more, so that nobody would think that things will be all that tough. The economic crisis was said to be the most serious since the 1930s, but when improvements in programmes are announced, people think, "Well, it can't be all that bad, can it?" What has added to that illusion is the fact that the Government have been printing money, between 98 and 99 per cent. of which has been buying the Government debt. What we do not know is what the markets will do when there is no more funny money to use to buy that debt. We know that there is £25 billion more; presumably, that money is being spent now and will, one hopes, take us up to February-but then things will hit the fan. Of course, the Government are taking proper actions such as saying to the banks, which behaved so irresponsibly in that earlier period, that they need to restructure their liabilities and assets so that they have a more stable basis from which to carry out their trade. Surprise, surprise, one of the assets that the Government say that the banks should have more of are Government gilts. The danger is that if the international markets do not believe us, those gilts might not be much better than the American mortgage bonds that were floated a few years ago and that got us directly into this mess.
	I want to make a plea to the Government. The point of maximum danger will certainly come when we cannot, or are not going to, print any more money to buy our own debt. Earlier, I made a comparison between the current situation and the phoney war-the lead-up to the war. The comparisons are chilling. In 1938, people came to the House and to the Dispatch Box and told us that there was no real threat from the international situation and certainly not from Germany. Recently, there has been an unwillingness across the whole House to get to grips with the size and extent of the debt. That unwillingness has been equivalent to the denials about the dangers of Nazi Germany. Back then, when the Government started to lose support, they were forced to give a pledge to Poland. An equivalent pledge today is the Bill before us, which the Government would not have introduced willingly, but they know that they need to introduce it if they are to increase the confidence of the markets. In 1939, the then Prime Minister said to Montgomery when visiting the British Expeditionary Force, "I don't think the Germans have any intention of attacking us. Do you?" Montgomery soon put him straight on that. The bizarre denial of that time culminated in the Norway situation, when we all learned just how grave and perilous the position of this country was.
	I want to end by making a plea to the Government. The Conservative party did not have a terribly good record on Munich, so I am not trying to make party political points here; it is far more serious than that. It is a big regret of mine that in the lead-up to the Iraq war-and I am probably the only person in Christendom who still believes that the Iraqis did have weapons of mass destruction-I did not ask the then Prime Minister an obvious question about the plan for day two. I did not ask about the plan for ensuring that the country did not descend into chaos after the Government had been toppled. I therefore make a plea to the Chancellor, knowing that no one will be able to stand up and say that they have taken the relevant precautions. What defences have the Government thought through for if long-term interest rates do not rise in the way that the shadow Chancellor has described, but start to gather pace? What will our response be? What will be our defence to prevent further deterioration if we lose our credit rating? What do the Government have in the cupboard to ensure that we do not face a gilt strike when the Debt Management Office at the Treasury reports to the Prime Minister that it has not been able to garner enough funds that week to buy up the Government debt? Margery Allingham wrote a brilliant diary on the horrendous drift into war from 1938 to 1939. When the Norway disaster engulfed the country, she wrote of the then Prime Minister, Chamberlain, that he was a "vain old man with nothing up his sleeve." Please, God, I hope that this Government have a lot up their sleeve.

Jeremy Browne: My understanding is that the SNP aspires to be in coalition with the Conservatives after the general election, so they may be able to come up with a joint plan at that stage. Let me get to our deficit reduction proposals. The straightforward answer is that we are not saying that Departments should be ring-fenced. In the mind of some Members, the right hon. Member for Birkenhead may have exaggerated in his speech the scale of the threat we face, but he rightly warned of the scale of the problem, as I tried to do in the introduction to my speech. Our economy is 5 per cent. smaller than it was a year ago. We cannot carry on with all this "share the proceeds of growth"-with a robe of feel-good Conservatism, without wearing a tie-saying that there are no hard choices to be made. It is not a realistic way forward.

Andrew Tyrie: I did not think it would be possible for anyone's credibility to emerge from this debate weaker than the Government's, but after that speech I am beginning to wonder whether it is not the Liberal Democrats who have damaged themselves more in our discussion tonight. That really was a speech that missed the target entirely, if I may say so, yet it is a target that is pretty easy to hit.
	The language that others have used about the Bill is overwhelmingly condemnatory-a con trick, vacuous, irrelevant; I will not go through all the quotations that my hon. Friend the Member for Tatton (Mr. Osborne) read out. The one bit I agreed with the Liberal Democrat spokesman about was when he described the Bill as a dangerous and pathetic piece of legislation.
	The Bill will make bad law. It is declamatory. No explanation has been given about how it will be enforced. It will carry no credibility in the markets. Indeed, it could further erode credibility in the markets, as it may appear no more than a rhetorical substitute for the action we need. In other words, it will appear to be what it really is-mere words.
	But it is not just the confidence in the markets that I am worried about and that could be eroded. Legislation such as the Bill erodes confidence in Governments and gives politicians and Parliament a bad reputation. It is corrosive of respect for the rule of law and our institutions. The Bill is, of course, a political document designed to substitute for the markets' lack of credibility for the numbers in the pre-Budget report and the Red Book about how the deficit will be filled.
	That credibility deficit has three main causes. The first and immediate cause is that three quarters of the gap between spending and tax is now acknowledged, even by the Government, to be structural-that is to say, it will remain even after the effects of the recession on the deficit have been unwound. It has been created largely by explicit mistakes of Government policy in recent years, not by the crisis. The policy in question is the Brown spending binge that fuelled the boom and aggravated the bust. The Government increased public spending by much more than the economy was growing, and for many years.
	Spending has increased from 37 per cent. of GDP to 48 per cent. of GDP. In some ways, that is the most dramatic change in the structure of the UK economy since the wartime measures were unwound. Many of us on the Conservative Benches warned that such rapid spending increases posed a danger for fiscal policy. When I was shadow Paymaster General, I gave several warnings myself. I pointed out that
	"we could be heading for a serious financial threat to our fiscal position".
	It is, I said,
	"extremely worrying that we should be facing that threat at this point in the cycle."-[ Official Report, 17 March 2005; Vol. 432, c. 487.]
	The second cause of the credibility deficit-I said that there were three-is the sustained lack of transparency in the Government's accounts. If the markets cannot be sure of the Government's figures, they will fear the worst. Examples of the impenetrability of the accounts are legion. What really is the scale of the Government's liabilities? We cannot be sure. We have had some discussion of that this afternoon. It will fall to an incoming Conservative Government, aided by the office of budget responsibility, to find out.
	The third main cause of the collapse of credibility has been the emphasis in presentation on language rather than substance, and spin before action in the conduct of fiscal policy over a substantial period. The Bill is just one further illustration of that phenomenon-a phenomenon that we have had to endure for years. For example, we now know that the so-called fiscal rules were mere words. Their credibility was shot when the Prime Minister, who was then the Chancellor, fiddled his start date for the business cycle in July 2005, immediately after the election, in order to avoid admitting that he was breaking his own fiscal rule. Empty economic rhetoric has been the Prime Minister's stock in trade for a long time. It was, after all, the Prime Minister who, as Chancellor, as late as 2007 said in the House that
	"fiscal discipline is the foundation of the strength of Britain's finances."-[ Official Report, 21 March 2007; Vol. 458, c. 816.]
	Handing the assumptions in the Red Book to the Comptroller and Auditor General of the National Audit Office for supposed vetting was another gesture that eroded credibility. It sounded good but it was an insubstantial thing to do, as the markets soon discerned and as the Comptroller and Auditor General more or less admitted in evidence in public session in a Committee. In the end, it has only made Labour's credibility problems even worse.
	I said at the beginning that the three main causes of the credibility deficit-the structural origins, the lack of transparency, and the empty rhetoric-cannot be addressed by Labour's current measures, but they can be assuaged by other practical steps. First, on the structural gap between spending and tax, the obvious answer is to set out how the gap will be plugged. That is what we have just been discussing with the Liberal Democrats.
	In practice, that means explaining how public spending will be cut. It means reversing a proportion of Labour's spending binge. But Labour have done the opposite. They have announced increases in spending of £3.5 billion and they have even cancelled the spending review. That leaves a gaping hole in the credibility of Labour's overall financial policy.
	Members of the Conservative Front-Bench team have been courageous in coming forward with a number of tough measures in recent announcements and have talked of an age of austerity. It is fair to say that the Conservative party has gone further than either of the other two in making a clear case for the reality of the situation-the reality that we will have years of very difficult fiscal policy before we can get overall financial policy back on an even keel.
	More will need to be done by us from within Government, where I hope we soon will be, to find out the true scale of the deficit and to make it fully transparent. Then an analysis of the relevant merits of various additional measures can be done with full civil service support. I cannot stress too strongly that it is only by working with civil servants, drawing on their expertise and reviving a Whitehall culture of thrift, which has sadly been lost, that we can hope to restore Britain's public finances. The main reason for the binge was political, but a major subsidiary reason has been Labour's failure to mobilise Whitehall to the cause of the efficient use of public money.
	The second point that I want to make in this respect is on the credibility of the numbers on the basis of which decisions will be taken. Have Labour really been cooking the books? Perhaps scarcely at all. Perhaps a lot. We do not know. Twenty years ago I left the Treasury and went to spend a very enjoyable year at Nuffield college, Oxford. There, among other things, I wrote a short book on public expenditure and fiscal policy. Two of the suggestions in that book, eventually published in 1996, were to create an independent national statistical office and to create a fiscal policy committee charged with the task of producing the forecast and thereby bolstering the credibility of the Government's accounts.
	From the Front Bench a little over five years ago, I worked up those proposals at the request of the then shadow Chancellor, my right hon. Friend the Member for West Dorset (Mr. Letwin). They were subsequently published as "The Independent Fiscal Projection Committee" and "A Framework for Statistical Independence". The Government responded to the first after the election by giving independence to the Office for National Statistics, but the second pillar of the plan was wholly ignored by the Government.
	I was delighted when my hon. Friend the Member for Tatton (Mr. Osborne) took up the latter idea. His proposed new body, which he has called the office for budget responsibility, goes further than I proposed in 1996-a good way further-and further than my right hon. Friend the Member for West Dorset suggested in that document. I believe that what my hon. Friend has proposed will contribute to the economic credibility needed to reduce the deficit in one crucial respect, which he mentioned in his speech. It will put the Government at one remove from the forecasting business, with all the temptations to fiddle the forecasts that can come with that.
	Those two measures that I spoke about earlier, a credible plan to reduce public spending and a credible, independent, depoliticised and verified forecast, will act on the credibility deficit. That is important because, as the right hon. Member for Birkenhead (Mr. Field), who is no longer in his seat, pointed out, the credibility issue is not about mere words. It comes with a price tag, potentially huge in terms of loss of market confidence in plans to fund the deficit and service the debt stock. It is the Governor of the Bank who told us that the deficit, at nearly 13 per cent. of GDP is "truly horrendous". The debt stock will have doubled as a percentage of GDP to nearly 80 per cent. shortly, as the spokesman for the Liberal Democrats, the hon. Member for Taunton (Mr. Browne) pointed out.
	Even if credibility is eroded only to the extent that it represents, say, 50 basis points on debt servicing costs, we are talking about billions and billions of pounds in higher taxes or lower public spending for a generation. Even more perilously, the loss of credibility could manifest itself in a collapse in people's confidence in the currency.

John Redwood: My hon. Friend is absolutely right. We clearly need a lot more growth; I think that that is also common ground between the main parties in this House.
	The evidence of our past successes and failures as a country is very clear. When a Government have had the courage to cut the marginal rates of income tax on people of enterprise and investors and to cut the rates of profits tax and other taxes on employment in small businesses, there has been a proportionate improvement in the growth rate and an increase in the tax take from those sectors. Governments who have gone for extremely high penal rates of tax on the rich, the successful and the potential investors who might do something to improve our economy have had the reverse experience. They have discovered that growth has slowed or gone into reverse, and that lots of bright and talented people have gone abroad because they do not wish to pay such tax at all. That would be even more true today in this extremely footloose globalised world. Surely we should learn the lessons of the '70s, when Governments had high taxes and it did not work, and the '80s, when they summoned up the courage to cut the taxes and it started to work rather well with the enterprise policies that were introduced. The same has been true all around the world. Wherever a country has had the courage to set very competitive tax rates on enterprise, business, success and investment, it has found that it gets a lot more revenue in.
	As I always try to tell the Labour party, the best way to tax the rich-I would like to tax the rich more as well-is to cut the tax rates, because we then have more rich people in this country who pay more tax, because it is less worthwhile to pay for all the accountancy advice to get around it, and venture more of their money. This morning I spoke to a successful entrepreneur who told me: "I'm on strike. I was a successful entrepreneur. I sold my company because the climate was becoming so hostile in this country. I managed to sell up before the crash. I have no intention of going back in because they're making the climate even more hostile-I'll sit on my backside and do nothing for a bit."

John Redwood: I have made a clear statement about what I believe is the way that works best, and I trust that a future Government will be wise and will want to set competitive rates of tax on enterprise, success and rich people so that we tax them more in the way that I have described. That is clear advice that I am sure will not fall entirely on deaf ears, because it works and has worked in the past and elsewhere in the world.
	In clause 1, after the extraordinary claims and strange wording that I have mentioned, we go on to be told that in due course net debt has to start to fall as a proportion of gross domestic product, but only in the final year of the period. The Chancellor effectively confirmed that the Bill is drafted in that way because the Government do not believe they have any chance of getting net debt down as a proportion of our national income until 2015-16. That could well be after the next election but one, in two Governments' time rather than one. It is remarkable that they can be that precise in thinking that that will be possible by that stage. For once, I agree with their realism that, with their policies, they will not get net debt down any time soon, and not before 2015.
	My hon. Friend the Member for Stone (Mr. Cash) rightly pointed out that the debt is grossly understated in the figures that the Government use. The Office for National Statistics has got nearer to the truth. I have always cited a figure of £3 trillion plus for the true level of debt and obligations of the British state. Now that the Government have gone to the aid of banks in difficult situations and allowed the pension deficits to build up so colossally, that is the kind of figure that we would come up with if the British state account were put on the basis on which the British state puts any reputable company account. I see no reason why it should be treated differently. Clause 1(3) is pretty meaningless, because the Government will clearly carry on using definitions of net debt that no one else believes. Everybody else knows that they greatly understate the position.
	That brings me to another problem with the Bill. The part about interpretation, definitions and so forth is one of the slenderest that I have ever seen in a piece of legislation. I presume that that is intentional and designed so that were there to be a future Labour Government in the time period in question, they could play all sorts of games with the definitions of net borrowing and net debt if things went wrong, just as Labour played all sorts of games with the cycle and the definitions of the golden rule in its earlier years in Government. The Bill is shoddy and unacceptable because there is no professionally and internationally agreed definition of the debt and borrowing that they are trying to measure. Doubtless they would want to leave quite a lot out by anybody else's standards of financial reporting.
	My hon. Friend the Member for Tatton made mincemeat of the Treasury imposing a duty on itself and of the fact that there are absolutely no sanctions on anyone involved in this sorry charade. It is not so much a case of Ministers giving themselves a "get out of jail free" card in case something goes wrong as giving themselves a card that says that no Minister ever goes to jail or suffers any other penalty of any kind, however bad, grotesque and wrong their implementation of the policy.
	The Bill is a worthless piece of paper and an unnecessary intrusion into what should be a serious debate. It will not take a trick with the bond markets in the City or with anybody in this place other than a few Labour loyalists. It is a political prank, an expensive press release. It is wasting the time of the House and it is completely unsubstantiated by any plans.

John Redwood: My hon. Friend tries to tempt me to be a bit more outspoken, but the House knows me all too well-I am not characteristically outspoken.
	I return to the divide on the timing of the reductions that the Bill requires. The Government's case is that they should delay the reductions for about another year. That is felicitous, because it will get them through the general election period and put all the burden of the cuts on to a future Government, but perhaps they actually believe what they are saying. Maybe they believe this neo-Keynesian nonsense that they have come up with that the only thing that is sustaining the economy is the excess public spending and borrowing, and if they started to reduce it now, it would plunge the economy back into a nasty recession. I have some simple questions for them about that. If all this public spending and borrowing is so good, why is our economy still in recession, as the Chancellor admitted from the Dispatch Box? Why is it the only main economy in the world that is not out of recession? As they have made so much more of the matter and are borrowing so much more as a proportion of national income than most competitor and comparable countries, one would have thought from their analysis that we would be romping out the recession ahead of the others. Instead we have been mired in it for all too long. Let us hope that we are now coming out of it. There is evidence of some revival in the private sector, which is most welcome.
	Another problem that the Government have with their punk Keynesianism is the idea that all this spending is somehow not getting in the way of borrowing and spending in the private sector, which of course it is. The only individuals and institutions in this country that can borrow on the scale that they want to at the moment are public sector ones. The Government have developed a sort of recycling machine whereby money is lent to the banks, who lend it back to the public sector, and the Bank of England prints the money just to ensure that the Government can afford to buy all the debt that they are creating to route through the public sector.
	The Government have a public financing system on a merry-go-round of borrowing and buying debt, particularly using the publicly owned banks, at the expense of everybody else. The small business people I speak to in my constituency and elsewhere tell me that it is still a nightmare trying to get the borrowing that they need to carry out their business, let alone expand it. Individuals are still finding it extremely difficult to borrow money that they might want to start up a business or buy an asset that they could productively use.

Katy Clark: Each situation needs to be looked at on its merits. With the banking sector, there was no alternative, because if the banks had collapsed, the economic situation would have been much worse, given that the economy depends on them. I would have welcomed greater support from the Government for the manufacturing sector, and I will support any such provision in the times to come. The retail sector is in a slightly different situation. There is a long-term argument for retaining a steel industry and other parts of the manufacturing sector, because we will rely on them in years to come. Once we lose those sectors, they will be very difficult to recreate. Those of us from the north and Scotland-the more industrialised areas-know of the proud industrial traditions of this country. We were at the forefront of manufacturing and development, but that is no longer the case in many sectors of the economy.
	The right hon. Member for Wokingham (Mr. Redwood) talked about substantial reductions in public sector jobs. If we are to follow the advice of all the Front-Bench teams, especially of the official Opposition, we will see substantial cuts in public sector employment, which will have massive economic implications, especially in those parts of the country that are more heavily reliant on public sector jobs. As has been pointed out, if jobs are lost in the private sector, tax revenue is lost and we no longer have the benefit of the production by that individual. But the same is true in the public sector. There is a huge cost to the state in the loss of employment in the public sector and, at a time when we have to be alert to the risk of growing unemployment, any solution that involves cuts in public sector jobs is a very short-term approach.
	In recent months we have had much debate about the possibility of a double dip recession, and that is a genuine risk. It is difficult to predict when we can start to consider how to reduce the deficit, and that is one reason why I feel it would not be helpful for any Government to have the restraints in the Bill placed on them. No Government, of any political persuasion, would have been able to predict some of the economic experiences that we have had in the past three years. As a Labour MP, I do not want to see my Government constrained in that way. I want Ministers to be able to respond to events, use their judgment and do everything that they can to protect the British economy and the British people. Therefore, as a matter of principle, I am not convinced that a Bill is the most helpful approach.
	However, the real reason why I feel unable to support public spending cuts of this nature is the types of cuts that they will likely mean to some essential services. I have voted against various Government proposals that have amounted to substantial public expenditure, including Trident replacement and the identity cards scheme, and I believe that there will be a range of other Government initiatives, such as the NHS computerisation programmes, that perhaps we should look at as well.
	I am not saying that there are not areas of public spending that very legitimately we need to look at. Of course, we are currently embroiled in overseas armed conflict. I have never voted in the House on those issues because there have not been any votes since I was elected in 2005, but before I became an elected representative in this place I marched against those conflicts. We need to have a serious discussion about our society's priorities and values. My concern about the Bill is that yet again the poor will pay the price when those who have the power and run the show make mistakes. Bizarrely, over the past one and a half to two years, the debate has gone from being about the mistakes made by those running the banks to how we can most effectively and severely cut public spending, and of course it will be my constituents and those of every Member in this House who will pay the price.
	I understand the reasons for the Government's stance. However, over the coming months we must be extremely careful in our approach towards the public sector, particularly education, health and the other essential public services on which the most vulnerable in society rely. Many of those services have been fought for by individuals and communities generation after generation, and if we start down the path of closing community halls, libraries and other services, they will not come back easily. I would like injected into this debate a discussion about not just cuts, but our society's values, and we need to say very clearly that it is not those at the bottom of the heap who have got us into this mess. As we move forward, we must also say that it is our role as elected representatives to ensure that they are not the people who pay the price.

Philip Dunne: I am pleased to have an opportunity to contribute to this debate, on what is the first parliamentary day of the new decade. It is also the first parliamentary day of the final year of this Parliament and, I hope, of this Government. Change will undoubtedly come this year, in that it has to be an election year.
	As previous speakers have noted, the election is at the heart of this Bill. That observation has not been confined to politicians in this Chamber, as it has been made by outside commentators as well. In its commentary on the pre-Budget report, Goldman Sachs wrote:
	"The UK press has concluded that the relatively slow pace of tightening, which doesn't begin in earnest until 2011, reflects politics more than economics-there's a general election next spring."
	We will have to wait and see whether Goldman Sachs is right about the spring, but the sentiment reflects what the Bill is all about.
	I want to add my voice to those who have spoken in the debate and declared this to be an utterly feeble Bill. The only support for it has come from those on the Government Front Bench. It is one of the thinnest pieces of legislation that I have seen since I arrived in the House nearly five years ago, and it has quite properly been ridiculed-by the shadow Chancellor in particular, but also by every speaker other than the Chancellor himself.
	No other issue is more significant, or a greater plank in the Government's own election planning, than sorting out the public finance deficit that this country faces after 13 years of Labour mismanagement. There is no bigger issue facing the country, or for voters to consider at the coming election. No difference between the Government and the Opposition is more striking than their respective approaches to dealing with this matter: the Government are clearly divided, and the Opposition are clearly united.
	We could not have illustrated that better had we, as the potential Government in waiting, planned today's debate and set out the approach to be taken by Labour Members to supporting their own Government's legislation. They have not followed that approach. I said earlier that, apart from the Chancellor's, only one speech had been made from the Labour Benches, but now there have been two. Both speakers have said, in terms and at the outset of their remarks, that for very different reasons they would not be supporting the Bill.
	There has not been a single speech in support of the Bill. That shows more clearly than we could ourselves the truth of the shadow Chancellor's allegation in his remarks that there is division at the heart of Government over how to tackle the deficit. As we have all acknowledged, I think, that is the critical issue that the country faces at present.
	So given that lack of interest, I have to ask why the Government business managers have decided to rush the Bill through the Committee stages on the Floor of the House. The obvious answer may be that they need to get the Bill through quickly to have it on the statute book ahead of a general election, which may be called in early or late spring. But that is too simplistic an answer to my question. I think the simple fact is that the Bill will not be handled in Committee, where evidence sessions could be taken, because the Government are incapable of finding anyone to call as a witness to support the Bill. The evidence sessions would merely give grist to the mill of the Government's opponents on their own Back Benches and on the Conservative Benches in pointing out what a perfectly frivolous and ludicrous piece of legislation we have before us. In short, we are not dealing so much with solutions to a credit crunch. The Government are trying to deal with solutions to a credibility crunch.
	The Government have form on the issue of fiscal stability. In his famous, or should I say infamous, Mansion House speech in 1997 the present Prime Minister, then Chancellor, set out his fiscal rules-his first attempt to provide an aura of credibility for his approach to the public finances. He said:
	"We will introduce tough rules for government borrowing."
	A year later, he told us:
	"I will never let the deficit get out of control. We will not spend money we have not earned."
	Well, we all know what happened to those fiscal rules. The goalposts were moved as soon as it looked like they might be missed.
	The commentators at the Institute for Fiscal Studies spelt out in their 2007 budget briefing:
	"The perception that the Chancellor has moved the goal posts and has delayed the tax raising measures and cuts in spending plans that we and other independent commentators had been saying would be necessary until after the 2005 election undermines the credibility of the fiscal framework."
	The measures were obviously dropped.
	What is the impact of that lack of credibility when it comes to dealing with the current state of the public finances? We have heard from other speakers this evening about the impact within the market. The right hon. Member for Birkenhead (Mr. Field) drew analogies with the run-up to the second world war, clearly with an eye to securing an impact in the media. The impact of the lack of credibility is extremely significant. It is not just the credit rating agencies, which have put the UK sovereign debt on informal credit watch. It is not just the market commentators, who are saying that the Bill will do nothing seriously to address the debt-to-GDP ratios, which must fall faster. The Governor of the Bank of England himself has said that the deficit needs to be reduced much faster than is proposed in the Bill.
	Apart from the commentators, the markets themselves are telling us that we are getting perilously close to an apocalyptic scenario. Let us look at the three market measures that are most regularly used to compare this country's public debt with that of our international comparators. We can see that the UK is in a perilous position. In the gilt market-which includes the impact of currency, so the measure is not the most directly relevant-the yield on medium-term gilt is up 43 basis points since 1 December 2009. There has been a similar increase in the US, yet in Germany the figure has risen by less than half over that period.
	We can look at inflation-linked bonds, which remove the differences in inflation between countries. Since 1 December 2009, UK medium-term inflation-linked bonds have risen by 23 basis points to almost 3 per cent.-2.96 per cent.-which indicates an inflation risk over the risk-free rate.

Sarah McCarthy-Fry: We must look at things in a wider context. We should remember that unemployment in this country is not as high as in other countries. We must examine all the factors.
	When the economy is better placed to support a more rapid tightening, fiscal policy will shift towards consolidation. Well timed and planned fiscal consolidation will support economic growth during the recovery. In line with fiscal objectives, the Government's fiscal strategy is threefold.
	First, we will base policy decisions on a realistic fiscal forecast, based on a range of assumptions, some of which are designed to provide caution for uncertainty. Secondly, we will ensure that the fiscal policy framework is set to deliver the Government's fiscal policy objectives. To that end, the Government have introduced the Bill. Thirdly, we will set out a credible plan to deliver sustained consolidation in the medium term to ensure sound public finances in a time frame that is consistent with economic recovery and growth. In line with that, the pre-Budget report outlines plans to more than halve the deficit in four years, and the fiscal consolidation plan included in the Bill embeds the deficit reduction. That is the sharpest reduction in the budget deficit of any G7 country.

David Gauke: Will the Minister explain what would happen if she were in Government in 2012 or 2013 and there were a recession? Would the target of reducing borrowing year in year out, as set out in the Bill, still apply? Is that the Government's position?

That the draft Crime (International Co-operation) Act 2003 (Designation of Participating Countries) (England, Wales and Northern Ireland) (No. 3) Order 2009, which was laid before this House on 4 November, in the previous Session of Parliament, be approved.-(  Steve McCabe.)
	 Question agreed to.
	 Motion made, and Question put forthwith (Standing Order No. 118 (6)),

That the draft Amendment to Schedule 6 to the Tribunals, Courts and Enforcement Act 2007 Order 2009, which was laid before this House on 20 October, in the previous Session of Parliament, be approved.
	 Motion made, and Question put forthwith (Standing Order No. 118 (6)),

David Amess: My hon. Friend the Member for Rochford and Southend, East (James Duddridge) has the honour to represent the town of Southend-on-Sea, which I can say without fear of contradiction is the finest seaside resort along the Thames estuary. In its heyday, going back to Victorian times, it was enjoyed by east-enders, not only for day trips but to spend long weekends there. Sadly, in 2010, British holidays are not quite as popular as they used to be, primarily because the cost of air travel is greatly reduced and we often cannot entirely rely on our climate.
	Southend is probably no different from any other coastal resort in having fewer people in jobs, higher levels of benefit claimants, and more people in poor health and with worse transport links than their inland counterparts. That is very common among coastal resorts. However, Southend is trying to re-establish itself as an attractive and vibrant seaside town for visitors and residents alike, and it is blessed with superb leadership from Councillor Nigel Holdcroft, who is the council leader, ably supported by his deputy John Lamb. We also have an excellent council chief executive, Rob Tinlin, who is supported by a superb team of officers.
	We are perhaps not quite in the strong funding position that we would have hoped for, because the last census was somewhat lacking in rigour. The Minister will understand that we intend to ensure that the next census is absolutely accurate, because the last one basically left off 20,000 people, which was very damaging in funding terms. However, I am delighted to say that a £25 million investment package will mean four new regeneration schemes. One is City beach on Marine parade, in my hon. Friend's constituency, which will be launched on 7 January.
	Congestion and weak transport infrastructure are challenges for the town, and the other three key development projects will significantly reduce congestion and journey times. Work on the Victoria gateway, again in my hon. Friend's constituency, will start in March. The other two projects are in my constituency. One of the worst bottlenecks in the town is at Cuckoo corner, where £5 million improvement works will begin in April. It is hoped that when the improvements are completed, there will be a reduction from the 400 minutes a day of congestion that is experienced at peak times. The final piece of work, which will be started shortly, is at Progress road, a key section of the main arterial route into Southend. Those are positive schemes that my hon. Friend and I welcome, but there are further bottlenecks at the Bell and Kent Elms junctions with the A127, and I hope that in due course there will be some improvements.
	The Minister will be only too well aware of the expansion of Southend airport. Most residents welcome the fact that there is an airport in Southend, but since its current owner, Stobart, put in plans to expand it, there has been some debate in the town about the benefits of the suggestion. I believe that the council will examine the proposals on 20 January. For my own part, I feel that to satisfy all residents' concerns there should be a public inquiry, but I know that the Minister cannot say anything about that and that it is a matter for the Secretary of State at the end of the day.
	The council has invested £5 million in the third phase of improvements to the A13, which is one of the town's main arteries and is also subject to bad congestion. Although Government funding was received for the first and second phases, for which we were very grateful, nothing was provided for the third phase, which covers the area from the entrance boundary with Essex to a third of the way into the town centre.
	I should tell the Minister that the decision not to extend the c2c and National Express contracts on our two rail links is creating uncertainty, particularly as there are negotiations under way with c2c and Network Rail regarding parking and redevelopment. I would be grateful if he had a word with his colleagues about the delay in that.
	I am delighted to tell the House that throughout the summer, Southend enjoyed a relatively high level of tourism, and the local authority produced an attractive programme of events for tourists to enjoy.
	I had the privilege of chairing proceedings on the London Olympic Games and Paralympic Games Bill, and I am a keen supporter of the games. Southend is bidding to become the United Kingdom's capital of culture for 2013, and several projects are under way that can only help the overall regeneration of the town. The international arts organisation, Metal, has come to Southend having renovated the grade II listed building, Chalkwell hall. I attended its launch at the end of September. It was a great occasion and a celebration of the town. Many events were held there, and that has done a great deal to boost morale.
	We hope that, in the longer term, Metal will encourage creative businesses to set up in the town, helping us to become a regional centre for the creative industries. I was delighted that, before Christmas, the Heritage Lottery Fund awarded Prittlewell priory museum a grant of £1,300,000. The grant will fund repairs and refurbishment, as well as creating new displays and a new external building, thus creating even more space for new displays. The project will also add new signage, trails and publications to connect Prittlewell priory with the surrounding area and landscape. The refurbished museum will tell the story of the priory from its monastic days to its life as a Victorian house, as well as that of the wildlife of the park. In addition to Southend council, the Friends of Southend Museums and the Cory Environmental Trust have pledged sums to match fund the lottery grant. That is all good news.
	We are delighted that Hadleigh, which is close to my constituency, will be a venue for the 2012 Olympic mountain bike events. In addition, many venues locally would make an ideal base for hosting teams from smaller visiting nations. For example, I recently had the privilege of opening Eastwood school's new, wonderful, first-class sports complex. That would be an ideal site for one of the smaller nations to use as a base camp.
	There will be a state-of-the-art swimming facility and a world-class Olympic-sized diving facility at Garon park. The council has invested £14 million to ensure that Southend residents, as well as visiting teams in training for the 2012 Olympics, can enjoy the facilities. In addition, other key swimming facilities in the town at Belfairs and Shoebury in my hon. Friend's constituency will be refurbished. I know that I speak for all local residents when I say that we are looking forward to the Olympic games. We certainly intend to ensure that Southend is at the heart of the celebrations.
	Given Southend's waning popularity as a destination for weekend visitors, we have tried to direct its energy towards the twin activities of becoming the centre of culture for the east and becoming a centre of learning. We have a wonderful college, which has joined forces with the university of Essex under the excellent leadership of the principal, Jan Hodges. It was opened in 2007, and we have a marvellous campus, with performing arts, a business school and health and human sciences. Recently, we joined forces with Basildon and Thurrock. We welcome the fact that Southend is the lead in the partnership, but are somewhat disappointed that there does not seem to be funding for a single campus for South Essex college. Until there is additional funding, we will have a split-site campus, which is not ideal.
	The Minister knows only too well that Southend has suffered a blow through job losses. HSBC has closed its card-processing facility, and 750 local jobs have been lost. I know that I speak for my hon. Friend when I say that we are concerned about the rumours of further job losses at Her Majesty's Revenue and Customs site in the town-the numbers working there have already been reduced. Further losses would certainly be unwelcome.
	Finally, the pier regeneration is very important. As the Minister knows, Southend pier is the longest in the world and the town is famous for it. We were very disappointed recently about it. We had been given the impression that we were to be given funds to develop and restore the pier given that it has had three fires, and we invested £36,000 on a design competition because we were encouraged to do so by the Commission for Architecture and the Built Environment, but unfortunately our bid was unsuccessful. The Department for Culture, Media and Sport announced only £5 million of major projects when it was expected that there would be £15 million. Was that why the decision was delayed by four months?
	About two years ago, a DCMS Minister was good enough to give us money to help deal with the cliff slippage that we suffered in Southend. The Department for Transport provided £1 million in the last financial year for emergency stabilisation in the west of Southend in Belton Hills and by Leigh railway station. Any further support the Government could give would be very welcome.
	In conclusion, we are very grateful indeed for the help that has been given thus far for the regeneration of Southend, but any further help would be very much welcome.

James Duddridge: I congratulate my hon. Friend the Member for Southend, West (Mr. Amess) on securing this debate and look forward to the Minister's reply, given that he recently enjoyed a visit to Southend and the surrounding area. I ask three things of him: to count correctly, to fund directly, and to get the infrastructure right.
	Counting correctly relates to the census. The failure to count 20,000 people in the 2001 census costs Southend £7 million each year, so counting correctly is the most fundamental single thing the Minister could review when considering the future prosperity and regeneration of Southend.
	Secondly, on funding directly, I say candidly that there are far too many organisations with their fingers in the pot. We have extremely good directly elected councillors, and they should be allowed to get on with the job of spending the money as local residents desire, rather than the money going through an alphabetti spaghetti of acronyms and quangos. Frankly, those not only add little value, but are sometimes destructive of the value the council could add. I ask the Minister to get rid of some of those organisations and to fund everything directly.
	Finally, on infrastructure, living in Southend sometimes feels like living on an island in the corner of Essex. We need to speed up traffic along the A127 and A13. The sea-to-sea rail line has been award winning, and despite the problems that National Express has had elsewhere in the eastern counties, I urge the Minister to consider awarding the contract and franchise to the existing management of the line, who have been absolutely fabulous. Given our road infrastructure problems, I would be very disappointed if the existing management of the sea-to-sea railway were not involved in the longer term franchise for the line.

Shahid Malik: It is a pleasure to engage in this debate under your stewardship, Mr. Deputy Speaker. I congratulate the hon. Member for Southend, West (Mr. Amess) on securing the debate, which is on a subject that is important to him, his constituents and others living in Southend. I also congratulate the hon. Member for Rochford and Southend, East (James Duddridge) on his contribution.
	As I was sitting on the Bench earlier, a number of Ministers who have had the same responsibilities asked what debate I was here for. When I told them that it was on the regeneration of Southend, three of them said, "I've done that in the past." That is testament to the hon. Gentleman's commitment to his constituents and their well-being-and that goes for the hon. Member for Rochford and Southend, East as well.
	It has been just over a year since we last had a debate about regeneration in Southend, and there has been much progress since then, as I saw when I visited in September. Since my visit I have been a big fan, as I was incredibly impressed. The hon. Member for Southend, West mentioned leadership, and I was impressed by the leadership and the partnership at work in Southend. I am very aware that partners in Southend have been working hard to ensure that the town becomes a thriving regional centre, with culture and commerce at its heart, and that it is seen as an exciting place to live, work and visit.
	One of the most impressive things I saw was the education hub of South East Essex college and the University of Essex in the town centre. Those developments have attracted multi-million pound investment and brought many benefits, including employment opportunities, supporting learning and raising skills levels, and transforming the street scene with more young people living in and around the town centre.
	I also note the comment made by the hon. Member for Rochford and Southend, East about counting. I am not fully aware of the issue, but I will get back to him with more information about the census. The issue was also raised by the hon. Member for Southend, West.
	It is not surprising to find that regeneration features strongly in the recent comprehensive area assessment for Southend, published last month. The assessment recognises the important role that regeneration has played in transforming the town and highlights not only the education hub but other developments such as Pier Hill, Hamlet Court road and the network of 11 children's centres, many of which are located in the central areas of the town that I saw on my visit.
	Importantly, Southend's regeneration has not simply been about bricks and mortar; it has also been about people, businesses and communities. It is about instilling confidence and encouraging people to join in and helping them feel in control of what goes on in their town. It is therefore important that we build on this success and exploit the potential within Southend. The local strategic partnership, Southend Together, has a shared vision to
	"ensure Southend is a proud and dynamic city".
	Partners have been working together very productively to deliver that vision, and I was pleased to meet many of them during my visit last year. I mean that very sincerely.
	There are also significant opportunities to promote the advantages of Southend's location close to London and the 2012 Olympics; to become both a nationally and internationally recognised centre of educational and cultural achievement; to make maximum use of its physical assets including the seaside and the magnificent world record-breaking pier; and to promote Southend as a place to live and work, as well as to visit. It is very good news that Hadleigh Farm has been selected as the venue for the mountain bike events in the 2012 Olympics. I know just what an inspiring venue it will be, with an amazing view across the Thames estuary-Constable country at its best.
	I am sure that hon. Members will agree with me, however, that along with such opportunities, Southend, like many other seaside towns, still faces a number of real challenges, and the hon. Member for Southend, West alluded to many of them. It has significant pockets of social and economic deprivation, mainly centred in the Milton, Victoria and Kursaal wards, all of which rank in the top 3 per cent. of most disadvantaged wards in the country according to the indices of multiple deprivation.
	Southend has of course not been immune from the effects of the global economic downturn, as the hon. Gentleman highlighted. It has some of the highest unemployment rates in the east of England. The claimant count in November 2009 was 5 per cent. compared with 3.4 per cent. for the region. It was 50 per cent. higher than the same time a year earlier, although unemployment has stabilised in recent months.
	The hon. Gentleman was right to mention the airport. Certainly when I was there, there seemed to be a consensus among the regeneration leadership that it could be a good thing. However, he was right that it would be inappropriate at this stage for me to comment, given that it is likely to come before my Department and the Secretary of State in due course.
	The hon. Gentleman will be aware of the urban regeneration company for Southend, Renaissance Southend Ltd, which brings together all the public and private partners in the area and the central area master plan, looking at the potential for redeveloping the town centre and improving the commercial seafront as a visitor attraction and destination.
	The East of England Development Agency is supporting Renaissance Southend Ltd through core funding, as well as working with it and the council. It has invested more than £30 million in Southend over the past five years, most recently-I appreciate that the hon. Gentleman has already touched on some of these-on projects such as the £5 million redevelopment of the former Clifftown United Reform church into a state-of-the-art facility for the teaching, training, rehearsal and performances of the East 15 Acting School students, and the new student accommodation and car park on London road, which promises to be a striking landmark for the town. It is obviously a bold design and certainly will be a talking point.
	Both hon. Gentlemen have talked about the need to ensure that there is one Southend-in the sense that at the moment the various funding agencies perhaps cause confusion. I hope that they will be reassured that the new "single conversation", which has already begun between the Homes and Communities Agency and Southend partners on all aspects of housing, infrastructure and regeneration, will reduce some of the complexity.
	The HCA carried out a reprioritisation exercise in September 2009 for projects provisionally identified for funding in the Thames Gateway delivery plan. I am pleased to say that Southend did well out of that reprioritisation, with seven out of 10 potential projects placed on the high priority list for funding, which is testament to the hard work of stakeholders and the project teams. Six of those now have funding agreements in place or near to completion, providing more than £9 million of funding, in this and the next financial year, for a mixture of public realm projects and studies of development potential.
	Southend's role as a cultural and educational centre is being supported by partners in a number of ways. I am pleased to say that we have recently agreed to the merger of South East Essex college and Thurrock and Basildon college, which will help provide a wider range of curriculum and progression opportunities, further strengthening the education offer-something that is obviously critical given where we are in the economic downturn.
	Hon. Members will recognise Southend's aim to become not only the cultural capital of the east of England, but the UK capital of culture in 2013, with its recent bid "Southend's Got Front". As the hon. Member for Southend, West mentioned, the recent opening of Chalkwell Hall, the new home for Metal, will provide a low-carbon space that can be used as a power house for creativity in the community and far beyond, allowing artists to develop their talent and ideas.
	The City Beach project, of which the hon. Gentleman is aware, with public sector funding of £7 million, will bring urban design improvements to the central seafront and public realm, based on enhancing the promenade, improvements to the sea wall and the installation of architectural lighting.
	Improvements to transportation routes are important to the continued development of Southend. That point was well made by the hon. Gentleman. As was pointed out, a significant part of the borough council's plans is the work on Priory crescent and its junction with the A127 at Cuckoo corner-a pinch-point on the route to and from the eastern part of Southend. The Department for Transport has provided just under £5 million through the community infrastructure fund, or CIF2, taking the scheme through to completion by March 2011. Work on the Victoria gateway, which will provide improved pedestrian links between Victoria station and the town centre, will also start shortly. Both schemes should help to improve public transport prioritisation and through-route development of the south Essex rapid transit scheme. I also note the hon. Gentleman's point about c2c, which I will push in the direction of the relevant Minister.
	However, as we know, regeneration is as much about communities as it is about physical infrastructure. I would like to note some of the work seeking to improve the lives of those in the more deprived areas. We have allocated £1.6 million from the neighbourhood element of the safer and stronger communities fund to Southend-on-Sea. The programme has delivered genuine results, such as the small grant programme for local people developing schemes to support their residents, as well as neighbourhood wardens, who patrol the local area during daytime hours.
	Some £243,500 has been awarded from the social enterprise investment fund to set up the St. Luke's healthy living centre, a social enterprise aiming to improve the health and well-being of local people and create training, employment and social enterprise opportunities for residents. The local strategic partnership has also set up community voices, a series of free community engagement-focused events designed to give residents and businesses direct access to key agencies. The most recent event was themed "Beat the Recession", and provided advice and guidance on a range of topics, from personal finance to dealing with stress.
	The hon. Gentleman also spoke about the pier and the redevelopment there. Wave 3 of the sea change programme was heavily oversubscribed. The sea change partnership, which is led by the Commission for Architecture and the Built Environment, which manages the programme on behalf of the Department for Culture, Media and Sport and its partner non-departmental bodies, had to make difficult choices among good projects. Written feedback on why the bid was unsuccessful has been given to Southend borough council. Wave 3 of the sea change programme takes us to the end of 2010-11, and it is too soon to make announcements on public expenditure beyond then.
	There is no doubt that Southend is a place with a very bright future indeed. However, we must ensure that the momentum is consolidated and built upon. We recognise that, with other places, Southend faces challenges, some of which have been made more difficult in the current economic climate. The Government and local partners have been actively working together to try to reduce the impact of the downturn on local communities and businesses.
	 House adjourned without Question put (Standing Order No. 9(7)).